Name: Date:

Name: __________________________ Date: _____________

1. GDP is all of the following except the total:

A) expenditure of everyone in the economy.

B) income of everyone in the economy.

C) expenditure on the economy's output of goods and services.

D) output of the economy.

2. All of the following are measures of GDP except the total:

A) expenditures of all businesses in the economy.

B) income from all production in the economy.

C) expenditures on all final goods produced.

D) value of all final production.

3. Which of the following is a flow variable?

A) wealth

B) the number unemployed

C) government debt

D) income

4. The market value of all final goods and services produced within an economy in a given

period of time is called:

A) industrial production.

B) gross domestic product.

C) the GDP deflator.

D) general durable purchases.

5. GDP is the market value of all ______ goods and services produced within an economy

in a given period of time.

A) used

B) intermediate

C) consumer

D) final

6. All of the following transactions that took place in 2009 would be included in GDP for

2009 except the purchase of a:

A) book printed in 2009, entitled The Year 3000.

B) 2001 Jeep Cherokee.

C) year 2010 calendar printed in 2009.

D) ticket to see the movie 2001.

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7. When a firm sells a product out of inventory, GDP:

A) increases.

B) decreases.

C) is not changed.

D) increases or decreases, depending on the year the product was produced.

8. Assume that a firm buys all the parts that it puts into an automobile for $10,000, pays its

workers $10,000 to fabricate the automobile, and sells the automobile for $22,000. In

this case, the value added by the automobile company is:

A) $10,000.

B) $12,000.

C) $20,000.

D) $22,000.

9. An example of an imputed value in the GDP is the:

A) value-added of meals cooked at home.

B) housing services enjoyed by homeowners.

C) services of automobiles to their owners.

D) value of illegal drugs sold.

10. The underground economy:

A) is included in the latest GDP accounts.

B) includes only illegal activities.

C) includes domestic workers for whom Social Security tax is not collected.

D) excludes the illegal drug trade.

11. The best measure of the economic satisfaction of the members of a society is:

A) nominal GDP.

B) real GDP.

C) the rate of inflation.

D) the value of corporate profits.

12. If the GDP deflator in 2009 equals 1.25 and nominal GDP in 2009 equals $15 trillion,

what is the value of real GDP in 2009?

A) $12 trillion

B) $12.5 trillion

C) $15 trillion

D) $18.75 trillion

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13. If nominal GDP grew by 5 percent and real GDP grew by 3 percent, then the GDP

deflator grew by approximately ______ percent.

A) 2

B) 3

C) 5

D) 8

14. If nominal GDP increased by 5 percent and the GDP deflator increased by 3 percent,

then real GDP ______ by ______ percent.

A) increased ; 2

B) decreased; 2

C) increased; 8

D) decreased; 8

15. If GDP (measured in billions of current dollars) is $5,465, consumption is $3,657,

investment is $741, and government purchases are $1,098, then net exports are:

A) $131.

B) ¨C$131.

C) $31.

D) ¨C$31.

16. If GDP (measured in billions of current dollars) is $5,465, consumption is $3,657,

investment is $741, and net exports are ¨C$1,910, then government purchases are:

A) $2,977.

B) $1,910.

C) ¨C$843.

D) $1,067.

17. If total investment (measured in billions of current dollars) equals $741, business fixed

investment is $524, and residential fixed investment is $222, then inventory investment

is:

A) $5.

B) ¨C$5.

C) $15.

D) ¨C$15.

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18. GNP equals GDP ______ income earned domestically by foreigners ______ income

that nationals earn abroad.

A) plus; plus

B) minus; minus

C) minus; plus

D) plus; minus

19. National income differs from net national product by an amount called:

A) depreciation.

B) indirect business taxes.

C) a statistical discrepancy.

D) net foreign factor income payments.

20. Assume that apples cost $0.50 in 2002 and $1 in 2009, whereas oranges cost $1 in 2002

and $0.50 in 2009. If ten apples and five oranges were purchased in 2002, and five

apples and ten oranges were purchased in 2009, the CPI for 2009, using 2002 as the

base year, is:

A) 0.75.

B) 0.80.

C) 1.

D) 1.25.

21. Assume that the market basket of goods and services purchased in 2004 by the average

family in the United States costs $14,000 in 2004 prices, whereas the same basket costs

$21,000 in 2009 prices. However, the basket of goods and services actually purchased

by the average family in 2009 costs $20,000 in 2009 prices, whereas this same basket

would have cost $15,000 in 2004 prices. Given this data, a Laspeyres price index of

2009 prices using 2004 as the base year would be:

A) 1.05.

B) approximately 1.07.

C) approximately 1.33.

D) 1.50.

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22. Assume that the market basket of goods and services purchased in 2004 by the average

family in the United States costs $14,000 in 2004 prices, whereas the same basket costs

$21,000 in 2009 prices. However, the basket of goods and services actually purchased

by the average family in 2009 costs $20,000 in 2009 prices, whereas this same basket

would have cost $15,000 in 2004 prices. Given these data, a Paasche index for 2009

using 2004 prices would be:

A) 1.05.

B) approximately 1.07.

C) approximately 1.33.

D) 1.50.

23. Assume that the adult population of the United States is 191.6 million, total employment

is 117.6 million, and 9.4 million are unemployed. Then the unemployment rate, as

normally computed, is approximately ______ percent.

A) 4.9

B) 7.4

C) 7.9

D) 9.4

24. If 7 million workers are unemployed, 143 million workers are employed, and the adult

population equals 200 million, then the unemployment rate equals approximately

______ percent.

A) 3.5

B) 4.7

C) 4.9

D) 7

25. If the unemployment rate is 6 percent and the number of employed is 188 million, then

the labor force equals ______ million.

A) 11.28

B) 176.72

C) 188

D) 200

26. The household survey conducted by the Bureau of Labor Statistics provides estimates of

the number of workers ______, while the establishment survey provides estimates of the

number of workers ______.

A) self-employed; unemployed

B) unemployed; self-employed

C) with jobs; on firms' payrolls

D) on firms' payrolls; with jobs

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